Microsoft has renewed its push to catch up with Apple and Google in mobile devices, unveiling updated Windows Phone software with voice-search features and offering it for free to makers of smartphones and tablets.

Microsoft, which previously charged a licensing fee of $5 to $15 per device, will offer it without charge to makers of smartphones and smaller tablets with screens of less than nine inches, the company revealed at its Build developers conference in San Francisco on Wednesday (Thursday morning Australian time).

Microsoft vice-president Joe Belfiore talks to Cortana.

The new Windows Phone 8.1 software for smartphones and tablets includes a voice-controlled digital assistant called Cortana, similar to Apple's Siri, and will be rolled out to existing Windows Phone 8 users over the coming months.

Chief executive Satya Nadella, who was appointed to lead the world's largest software maker in February, is working to remake Microsoft for an era where smartphones and tablets have become central. To do so, he must strike a balance between offering Microsoft's software for competing platforms while still keeping the company's Windows operating system a core focus. This event was designed to re-emphasise the importance of Windows to the company and to spur adoption of the software.

A screenshot of Cortana in action.

"Microsoft is facing challenges on the mobile and tablet fronts and need to change their strategy to move the growth needle, this is a good and logical first step," said Daniel Ives, an analyst at FBR Capital Markets.

Cortana speaks

Microsoft vice-president Joe Belfiore said Cortana, which "fully replaces the search function on Windows Phone", is named for the artificial-intelligence character in Microsoft's best-selling Xbox game series Halo.

Developers outside Microsoft can write their own apps for Cortana, Belfiore said. With users' permission, Cortana can learn about consumers from their searches, keep track of people they interact with and set up an "inner circle" of the most important people and who can contact users during the times of day they set as "quiet hours".

Belfiore demonstrated how he allowed Cortana to scan his email, causing the program to ask him whether to track an Alaska Airlines flight mentioned in an email itinerary. The program can be used to start a Skype call, add a TV show to the user's Hulu queue or check a friend's Facebook posts.

"She's great at helping me get things done, whether it's by talking or typing," Belfiore said.

But the virtual assistant will only be available in the US at launch. Lifehacker reports Cortana will not hit the Australian market until at least 2015.

Windows Phone 8.1 will also have an action centre – a pull-down menu that gives people access to basic functions regardless of whether programs are already open. The update also lets users customise their phone's lock screen and offers new choices for tweaking the start screen.

Universal apps

Microsoft said apps across all its consumer platforms can now be "universal", meaning they will run across smartphones, tablets and PCs with little to no re-coding.

For developers, universal Windows apps have clear benefits. It means a developer needs only create a Windows app once, then make minimal adjustments to optimise the experience for devices with different screens and capabilities, since the platforms share APIs, security and other resources.

For users, the benefit is a consistent experience across every device they have running Windows software, and users won't have to buy the same app again if you want it on your smartphone, tablet and desktop.

Start menu

On laptops, desktops and larger tablets, Microsoft is restoring the Windows Start menu. It will not be available in Windows 8.1 Update, but in a future release. The company yanked the feature from Windows 8, triggering widespread customer complaints.

Microsoft operating systems chief Terry Myerson showed off the new version of the Start menu to the audience as he explained that users would be able to find apps via the menu.

The new Start menu looks similar to how it did in Windows 7, but it includes a minimised version of the Start screen beside it.

Additionally, computers with keyboards will now launch in the traditional desktop environment, bypassing the Windows 8 tile interface. Users could turn on this option previously, but non-touchscreen devices will now do this by default.

Delicate balance

Nadella's tricky balancing act was underscored by two Microsoft events last week and this week. The CEO last week debuted Microsoft Office software for Apple's iPads and said he'll "hold nothing back" to get the company's programs across all devices, in a clear departure from the software maker's long-time focus on Windows.

In contrast, this week's Build conference puts Windows front-and-centre by giving developers tools and tactics to boost Microsoft's single-digit share in phones and tablets, as well as providing money-making opportunities in a contracting PC market.

"We're going to innovate with a challenger mindset," Nadella said.

In making Windows free for smartphones and tablets, Microsoft is working to narrow the gap with Google, which distributes its Android mobile operating system to hardware manufacturers at no cost. Android has become the most widely used software in smartphones and tablets.

Windows share

Nokia's handset division, which is being acquired by Microsoft in a deal set to close this month, will begin selling new phones using Windows Phone 8.1, said former Nokia CEO Stephen Elop.

The Nokia 930 is a high-end device that will debut in June and feature wireless charging, while two cheaper phones designed for emerging markets will become available in May, said Elop, who will become Microsoft's executive vice-president of devices when the transaction with Nokia is completed.

Windows stands to be the fastest-growing smartphone operating system over the next four years with 30 per cent annual growth, according to IDC. Even at that rate, Windows Phone would only make up 7 per cent of the total market in 2018, compared with Google's Android at 76 per cent Apple's iOS at 14 per cent.

In tablets, Windows had 3.4 per cent share in 2013, IDC said. For Microsoft's Surface tablet, the share was 1 per cent.

Global computer shipments fell a record 10 per cent last year and are forecast to continue to decline this year as tablets and smartphones lure consumers away from traditional desktop and notebook designs, according to IDC. Tablet sales volume – dominated by Apple and Google, whose operating systems account for 95 per cent of that market – will rise an average 16 per cent annually through to 2017.